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Bata Shoe's profit jumped 35 per cent year-on-year to Tk 0.18 billion in the first quarter of this year, driven by winter and Eid sale bonanza.
Thus the earnings per share stood at Tk 13.42 for the January-March quarter of 2024, up from Tk 9.96 a year ago, according to a stock exchange filing on Tuesday.
According to the company, EPS increased significantly year-on-year in the quarter due to revenue growth supported by a higher demand for footwear following the beginning of school year and during the winter season. Eid sales and other promotional activities also led to higher sales.
Data shows that the multinational footwear maker is gaining back its market and efficiency in Bangladesh.
Bata Shoe was the market leader in Bangladesh. But then it began facing a fierce competition with local shoemakers, which led to a gradual decline in annual revenue.
In 2020, Bata showed a loss for the first time in its history in Bangladesh, hit hard by a negative revenue growth in the year, compared to the year earlier. The company remained in the red in 2021.
Losses in two consecutive years prompted the company to change its strategy and product line for survival.
The move seems to have paid off. The revenue jumped 14 per cent year-on-year in the quarter through March this year.
Bata's profit margin also showed a recovery trend. In 2017 or 2018, the shoemaker made a profit of about Tk 9 from every one hundred taka of its revenue. The profit margin fell to Tk 2 in 2020. It has been improving since 2022. The profit margin was 6.5 per cent in the first quarter of this year.
Higher profit margin was achieved by curbing costs.
Bata's cost of goods sold amounted to Tk 55 for every hundred taka of revenue in the first quarter through March this year, which was Tk 65 in the same quarter of 2021. That helped cut operating costs.
The company also managed to keep its finance cost low despite interest rate hikes.
Meanwhile, the stock fell 0.02 per cent to Tk 966 per share on the Dhaka Stock Exchange on Tuesday.